Child Support Woes of the 1%

Child Support Woes of the 1%

There aren’t many whose earnings can make those of the Buffets, Kochs, Adelsons, Waltons and the like look paltry. But according to filings in his divorce case, billionaire hedge fund manager Ken Griffin may be one of them. Griffin’s ex-wife, Anne Dias, said his monthly gross income “approaches $100 million,” and his net monthly income after taxes “averages over $68.5 million.”

For those of us to whom such numbers do not even compute, that works out to $2.2 million a day, or upward of $90,000 per hour.

Dias’ filing is certain to escalate their ongoing dispute over child support, where she is asking for $1 million a month in child support. Griffin argues that amount is excessive and includes expenses such as private jets, $450,000 vacations and $6,800 a month for groceries that are mainly for Dias’ “opulent lifestyle.” He has told the court he will only fund expenses he deems “reasonable.”

Dias says she’s following Illinois law, which requires a parent to fund the children’s lifestyle in a way that is consistent with the lifestyle during their parents’ marriage. According to Dias, the expenses such as the jets and groceries are simply an accounting of all the couple’s child-related expenses while they were married.

“Ken’s false incredulity as to the cost of his children’s lifestyle—a lifestyle which he established and continues to enjoy with the children—is pure hypocrisy. “In her filing, Dias acknowledges the family’s large spending habits. But she says Griffin funded and created the lifestyle, so he has little reason to object.

“It’s a silly exercise to pretend the day-to-day living expenses for the Griffin children even remotely resembles the norm,” she said. But she adds, “Typical American families do not have a father with a net monthly income of just shy of $70 million.”

In California, child support is determined based on statutory guidelines that took effect in 1992. The Guideline is an algebraic formula and the factors used to determine child support are primarily based on income of both parties, the number of children and the time sharing arrangement – custody and visitation.

The Guideline result is deemed to be presumptively correct in all cases, but may be rebutted by evidence of various factors including that “the parent being ordered to pay child support has an extraordinarily high income and the amount determined under the formula would exceed the needs of the children.” Family Code, Section 4057(b)(3).

Individuals who earn an extraordinarily high income and are subject to child support payments may find that proportionally, their child support payments exceed the necessities of the child.  California law allows for exceptions to the child support calculations if an individual is able to prove their high-income status.

California Family Law §4055 sets forth the ordinary guideline for calculating child support payments.  However, §4057 provides the special circumstances under which this guideline can be set aside to account for high-income earning parents who are subject to a child support order.  Under this section, the individual being ordered to pay child support can ask for the ordinary guideline for child support to be put aside if he or she can provide evidence of the high income and show that the amount determined under the guideline formula would exceed the child’s needs.

Although California statutes provide the possibility of taking into consideration high-income earning parents when calculating child support payments, case law has not yet determined an exact number that qualifies an individual as a “high-income earning parent.”  The California Court of Appeals has ruled in previous cases that anywhere from $1 million to $12 million in annual income is considered an extraordinarily high income.  In the 1994 case of Estevez v. Superior Court, an income of “not less than $1.4 million per year” was considered an extraordinarily high income.  In 1996, the court found a similar guideline in McGinley v. Herman.  In 1998, in Johnson v. Superior Court, a professional athlete conceded his annual income to be $1 million, whereas his wife stated she believed his income to be $12 million.  Regardless, the court considered the athlete to be a high income earner.  In 2001, the court decided that an annual income of $1.7 million was extraordinarily high, from In re Marriage of Wittgrove.  Also in 2001, from In re Marriage of Hubner, the court found $1.175 million after taxes to be extraordinarily high.

The range of income levels from the court’s previous decisions goes to show that determining whether a parent’s income is considered extraordinarily high to qualify as an exception or whether those payments would exceed the necessities of the child is ultimately up to the court’s discretion.

In the event that the court determines the parent’s income to be extraordinarily high, it is up to the trial court’s discretion to determine the amount it considers to meet the needs of the child.  §4056 requires that the court state in writing or on the record the following: “(1) the amount of support that would have been ordered under the guideline formula, (2) the reasons the amount of support ordered differs from the guideline formula amount, and (3) the reasons the amount of support ordered is consistent with the best interests of the children.”

The time involved and the resulting costs in litigating such cases, with the extensive discovery and litigation about discovery, are immense. And really, so unnecessary if the parents are willing to put their children’s interests by reducing the conflict and working together to create a mutual and reasonable resolution. And it should cost no more than a couple minutes of Mr. Griffin’s alleged hourly pay rate.

With offices throughout the Bay Area, California divorce lawyer Lorna Jaynes provides innovative legal tools to resolve family law disputes without the bitterness, acrimony and excessive costs engendered by the adversarial process.